FACTORS IN INDUSTRIAL COMPETITION. 437 more than the price abroad will depend upon the natural advantages of the situation. If an article cannot be made here as cheaply as abroad, then the question must be answered whether the public should pay the premium. If it can be made as cheaply, then competition will force it to be so made. (7) The "price abroad" is a term which, must be used carefully, for the price at which standard articles can be bought from time to time for delivery beyond the borders of the home market does not in the least represent what would be the price under a greater demand; such a demand, for instance, as would be made on Germany and the United States if all the steel works of England should •shut down. Neither do these quotations represent the real cost of manufacture. (8) The real cost of manufacture includes many things which are usually overlooked, but which are of immense importance. The main items are as follows, it being assumed for the sake of simplicity that a steel works owns its own ore and coal mines and coke pvens: (a) Actual operating costs at all mines and works,, including labor, fuel, repairs, etc., etc. (b) Freight charges on all raw materials and incidentals. .(c) Interest at 6 per cent, on all money actually invested in mines and plant, and on all floating capital needed to carry on the business. (d) Expenses incident to superintendence, selling agencies, taxes, bad debts, pensions, damages, etc., etc. (e) Depreciation, by which is meant a class of items generally overlooked. The ore and coal must bear not only the. interest on the money invested, but a sum sufficient to pay for an equal quantity of material when the beds are exhausted. The depreciation of the steel plant itself is still higher, for it is almost safe to say that to keep a steel works up to its value, to keep it as a factor in the great strife of competition, requires an annual expenditure of ten per cent, of its cost. Engines, boilers, rolling mills, cranes, shears and all the manifold equipment may last that time, may last longer, or may be outlawed before that period expires. A mill not up to date cannot compete with one that is, and if it cannot compete, then it loses money; and if it loses money, then it is worth nothing, absolutely nothing, no matter how new it is or how much it cost.